Friday, June 24, 2005

Investment in France/Germany drops, Tony Blair laughs.

EU: Well he should as even more evidence to back up his vision of how the EU should be, since the anti-business rantings from Germany and France scared people off.

Foreign investment in France and Germany fell sharply in 2004, reinforcing concerns that inflexible labour practices and weak domestic demand are driving investors elsewhere. In France, inward investment almost halved from $43bn (€35.44bn) to $24bn, according to figures released yesterday by the Organisation for Economic Cooperation and Development, the group representing the world’s most industrialised countries. In Germany, foreign investors actually withdrew $39bn, having invested $27bn in 2003. Mark Zandi, chief strategist at Economy.com, the consultants group, said the data showed US companies the main source of direct investment funds in 2004 were spending their cash piles mainly on Asian investments. “US companies are attracted to Asia partly because the currencies remain competitive, but also as low cost bases for production destination and as growing markets in their own right,” he said. “Europe is almost a mirror image of this, with a more expensive currency, weak domestic demand, high labour costs and, now, political uncertainty.” But the weakness of continental Europe did not affect the UK. Foreign direct inflows into the UK more than trebled to $78.5bn. The UK is among the world’s most active countries for direct investment, and is both a large recipient of investment and a big investor overseas."

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